South carolina payday loan laws
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South Carolina Law
Title loans in South Carolina begin at $601 because the state limits, or caps, the maximum allowable interest rate on consumer loans through $600. Consumer loans beginning at $601, therefore, are not subject to the interest rate cap. The state allows six renewals of consumer loans. Critics say that South Carolina allows title loans via a loophole.
How Title Loans Work
A customer whose automobile is fully paid for can obtain a loan for 30 percent to 50 percent of the car’s value. The highest advertised loan amount has been $10,000. The average annual interest rate is 25 percent. The borrower hands over the car’s title and a spare set of keys and then signs a loan application and promissory note. The loan will typically be
due for repayment of principal and interest in 30 days.
Title lenders will usually allow as many loan renewals, or rollovers, as the state allows. South Carolina allows six rollovers. Each time a borrower rolls over a loan, he pays the interest or finance charge. If the state allows loans to be rolled over each month, the borrower will eventually pay a finance charge of 300 percent (annual percentage rate).
Loss of Automobile
If a borrower fails to repay a title loan as originally agreed, the lender has the right to use the keys in his possession and repossess the customer’s car. Further, he has the legal right to sell the car and keep all the money from the sale, no matter what the unpaid balance of the loan is.Source: ehow.com
Category: Payday loans